FRACKING BOOM PUSHES U.S. OIL OUTPUT TO NEW HIGH

Production surges over 12M barrels per day, passing record

WASHINGTON — U.S. oil production surpassed 12 million barrels a day in April, further extending the nation’s record output during the fracking boom, the Energy Department reported Monday.

The milestone came less than a year after the United States surpassed 11 million barrels a day, in what had been a record at the time. U.S. output reached 12.2 million barrels a day in April, with Texas and the Gulf of Mexico accounting for more than half, or about 7 million barrels a day, the Energy Department said.

“The U.S. onshore crude oil production increase is driven mainly by developing (shale formations) using horizontal drilling and hydraulic fracturing,” the report said.

The surge in U.S. oil production, coupled with concerns about slowing global economic growth and energy demand, has kept downward pressure on crude prices in recent weeks. The decision by OPEC and its allies last week to extend output cuts has supported prices, although they are down 20 percent from a year ago, when they neared $74 a barrel.

Oil settled in New York at $57.66 a barrel Monday, up 15 cents.

U.S. oil production has been on a steady rise over the past decade, turning around a U.S. industry that had been written off as long past its prime, as investment dollars shifted to fields overseas. In 2008, U.S. production fell to 5,000 barrels a day, an almost 50 percent drop from 1970.

The industry today is setting new production records as it seeks to expand crude exports around the globe. Last August, the United States surpassed Russia to become the largest oil producer in the world. The Energy Department estimates that crude oil production from shale and other tight formations accounted for about 60 percent — 7.4 million barrels a day — of U.S. output in April.

Much of that success has come from the shale oil fields of West and South Texas, in particular the Permian Basin, an aged oil field revived by new drilling technology. Texas alone produced almost 5 million barrels a day in April, up more than 25 percent from the beginning of 2018.

The Energy Department noted that the Permian increase came even though a lack of pipelines from West Texas has led companies to slow production, leading thousands of drilled but uncompleted wells.

“Despite pipeline capacity constraints, the Permian region’s month-over-month growth averaged nearly 100,000 (barrels a day) for almost all of 2018” the Energy Department report said. “Industry efficiencies in pipeline utilization and increased trucking and rail transport in the region have allowed crude oil production to continue to grow.”